A business model that allows a company to procure agri-products directly from farmers, and which allows farmers online access to faraway markets; a newspaper that's customised to meet regional requirements from Day 1 itself; a company that extended beyond its manufacturing and tech capabilities to build a distribution network, offer content at never-before price points and in the process build a sustainable brand in the home video space. Those are just three examples of outstanding innovation— and you will read more about them in the pages ahead. They're not just new products or service offerings—if me-toos can swiftly come in and do the same, then that wouldn't qualify as innovation in the first place.
So what then qualifies as an innovation? For starters, not everything that is new counts as innovation. It has to be path-breaking, potentially disruptive and sustainable. How can companies do this? One way is to use what Monitor calls the Ten Types of Innovation(TM) a proprietary framework that helps broaden the drivers of value of a particular innovation along a much wider spectrum than just what the product or service "does". Breakthrough innovations almost always include multiple types of innovation: at least 3-4 out of the 10 types in the Monitor framework.
FIVE MYTHS OF INNOVATION
- Innovation is about creating a hot new product... New products are swiftly copied and rarely enjoy sustained profits.
- Innovation comes from being creative... It is far likelier to come from being disciplined.
- Innovation is expensive, demanding lots of resources... Failure to innovate is what is costly.
- Create hundreds of ideas because of high failure rates... Fewer, bolder ideas based on your company's capabilities and unmet customer needs you discover work best.
- Early financial analysis is key to approving concepts... Nearly always wrong—build prototypes instead.
How does the "Ten Types of Innovation" framework apply to Indian examples? To find answers to such questions, Business Today and the Monitor Group jointly interviewed key leaders at eight innovative organisations to study the reasons behind the success of their innovations. Each of the eight organisations exhibited four or more of the Ten Types of Innovations. Each illustrates how true breakthroughs are usually a set of innovative elements that work together as a holistic system and reinforce the competitive strength of the new product or service.
Innovation is about creating and capturing value through nontraditional approaches. It isn't only for rapidly changing, technology companies either—the traditional brick and mortar companies included in our study, from agri-commodities to print media, have each realised market success and impact in their industries from innovation.
BT-Monitor has selected eight organisations to profile in this study. Though they come from many industries—and even the social and government sector—each has demonstrated outsize impact in India based on its innovation. We carefully edited the selection to include only those companies whose efforts have not been recently or extensively reported (like the Tata Nano or the Aravind Eye Hospital). What's more, it's easy to confuse sundry launches and claims of differentiation and a competitive edge with innovation, and BT and the Monitor team looked at several examples of innovation before deciding on the final eight.
Understanding the 10 types is the first step toward being able to use them in your own innovation efforts. The remainder of this article defines each of the 10 types—broadly broken into four heads of finance, process, offerings and delivery—and provides illustrations.
Profound innovation was observed around business model, network, product performance, and customer experience. However, there is markedly less innovation among Indian companies around product system, service, channel or brand. Product systems and service (post-purchase) can enhance customisability and cement ties with customers by engaging with them throughout the ownership cycle, not just at purchase.